Although at the time of writing a charity sector specific
support package has not yet been announced, operational charities can benefit
from a range of government measures that have been introduced to help
organisations and businesses navigate this difficult time.
We have briefly summarised the key measures and highlighted
useful resources where you can find further information below.
·
The Coronavirus Business Interruption Loan
Scheme: Businesses are now able
to apply for loans of up to £5 million, and the first 12 months will be
interest free. The government provides a guarantee for 80% of the outstanding
loan balance. The scheme has been
available since Monday 23 March 2020 and all major banks are offering the
scheme. However, only those charities that earn more than 50 percent of their
income from trading will qualify for the scheme, which may not be very many as
the definition of trading is not entirely clear. It has been confirmed that charities with
trading subsidiaries will be eligible, as long as there is an inter-company
guarantee from the trading entity to the charity.
·
VAT Deferral: VAT payments for all UK
businesses will now be deferred for a three month period from 20 March 2020 to
30 June 2020. This will happen
automatically, so businesses do not need to apply for the relief, however those
who normally pay by direct debit should cancel the payment with their bank if
unable to pay.
·
Sick Pay refund measures: Small and
medium-sized businesses and employers will be able to reclaim Statutory Sick
Pay, paid for absences due to coronavirus.
The refund will cover up to 2 weeks' Statutory Sick Pay per eligible
employee. Employers should keep records
of staff absences and Statutory Sick Pay payments, however the employee does
not need to provide a GP letter in order to reclaim. To be eligible, business must be small or
medium-sized, and have employed fewer than 250 employees as of 28 February
2020.
To qualify as a medium-sized
company, at least two of the following requirements must be met (and for these
purposes, fewer than 250 employees is a necessity):
1.
Annual turnover must not be more than £36
million.
2.
Balance sheet total must not be more than £18
million.
3.
Average number of employees must not be more
than 250.
·
Time to Pay Scheme: All business with
outstanding tax liabilities may be eligible to receive support with their tax
affairs through HMRC's Time to Pay Service. Businesses that have missed a tax
payment, or might miss the next payment due to coronavirus, can contact HMRC's
dedicated helpline on 0800 0159 559.
·
Expanded Retail Discount Scheme: There
will be a business rates holiday for retail, hospitality and leisure businesses
in England for the 2020/2021 tax year.
This will apply to charity shops which have a business rates liability,
sports grounds and clubs, museums and art galleries, sport and leisure
facilities, stately homes and historic houses and theatres. Furthermore, those who are eligible for the
scheme with a rateable value of less than £51,000 will also be eligible for
cash grants per property. Properties
with a rateable value of less that £15,000 will receive a grant of
£10,000. Properties worth more than £15,000
but less than £51,000 will received a grant of £25,000. However, this is subject to the state aid
limit of €800,000 which may
limit the value of reliefs for larger charities. Charities should monitor the state aid they
receive to ensure they don't exceed the thresholds.
·
The Job Retention Scheme:
Under this scheme, all UK employers will be able to receive support to
continue paying 80% of the salaries of employees who would have otherwise been
made redundant during this crisis. In
order to receive this support, employers must
designate their employees as 'furloughed' and inform them of the
change. A change of the employment
status of a worker remains subject to employment law. HMRC has set up an online portal for
employers to submit information regarding furloughed workers and their
wages. HMRC is urgently working on systems
that will allow them to reimburse 80% of furloughed employee wage costs. Official
guidance is still to be published, and many questions have been raised about
the operation of the scheme.
If you would like further information the
Job Retention Scheme, please contact Chris Priestley, or a member of our
Charities or Employment Teams.
Further
information
The GOV.UK
support for businesses page sets out everything included in the
government's package of measures. Details
from the Government for employers is available here.
The Charity Commission has published a guidance page on Coronavirus
(Covid-19) Guidance for the Charity Sector. The page will be updated with responses to
questions on an ongoing basis.
The Charity Tax Group is maintaining a very useful Coronavirus
Information Hub, with information on various sources of support that
are available to charities, along with updates on the lobbying efforts on
behalf of charities.
The NCVO is publishing various blogs on different topics related to coronavirus, including developments in financial support for charities during coronavirus.
- Chris Priestley and Chloe Harris
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